Answer
a. small elasticities of demand and small elasticities of supply
Work Step by Step
If the elasticities are small, the increased prices and costs will not shrink the market as much.
Principles of Microeconomics, 7th Edition
by Mankiw, N. Gregory
Published by
South-Western College
ISBN 10:
128516590X
ISBN 13:
978-1-28516-590-5
Chapter 8 - Part III - Application: The Costs of Taxation - Quick Check Multiple Choice - Page 169: 6
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